Are Manufactured Homes a Solution to the Housing Affordability Crisis?

• An estimated 5.6 percent of all Americans, or 17.7 million people, live in manufactured homes, commonly referred to as “mobile homes” or “trailers.” Metros located in the South and Southwest have the highest share of households living in mobile homes.
• The number of mobile homes and trailer parks in the United States grew rapidly in the 1980s, when the federal government slashed funding for affordable housing. Today, mobile homes are the largest source of unsubsidized affordable housing in the U.S., providing shelter for one in ten households living below the poverty line.
• Nationwide, the average monthly gross housing cost for a mobile home is $564, compared to $1,057 for a site-built home or apartment. In the 100 largest metros, mobile home residents spend 40.5 percent less on housing costs than those living in non-mobile homes in the same metro, on average.
• Manufactured homes can be built faster and cheaper than traditional homes. Yet, even with a growing gap between the supply-and-demand of low-cost housing, they are rarely viewed as a solution to the affordable housing shortage. In less dense areas, local leaders can leverage mobile homes to increase the low-cost housing stock.

One in eighteen Americans live in a "mobile home or trailer"¹, according to data from the U.S. Census Bureau. Manufactured housing -- commonly referred to as “mobile homes” and “trailers” -- offer the largest source of unsubsidized affordable housing in the U.S., providing shelter to an estimated 5.6 percent of Americans, or 17.7 million people. In order to better understand the role mobile homes play in providing housing for low-income Americans and their potential to alleviate the affordable housing shortage, we conducted an original analysis of U.S. Census Bureau data accessed through the IPUMS database.

Mobile homes house owners and renters. An estimated 71.1 percent of mobile home households own their homes, while 28.9 percent rent. The households that own their manufactured homes still need to rent their trailer lot and pay for utilities to stay in a trailer park. Thus, mobile home owners face many similar challenges as renters, including potential rent hikes or evictions. Additionally, moving a mobile home is difficult and the potential for resale is low, creating a unique set of challenges for mobile home owners.

Although 6.6 million households -- about 5.6 percent of all U.S. households -- live in mobile homes, they receive little attention in part because manufactured homes tend to shelter vulnerable groups of people. Of Americans living below the poverty line, one in ten reside in a manufactured or mobile home, and the median income for living in a mobile homes is 43 percent lower than for households living in traditional real estate.

The median cost to live in a mobile home nationwide is $564 per month, compared to $1,057 to live in a non-mobile home. Despite the fact that mobiles homes provide much-needed, low-cost housing, they are rarely considered as an option for addressing the housing shortage. Although manufactured homes can be built faster and cheaper than site-built homes, their social stigma may prevent new mobile home parks from emerging in areas with a shortage of affordable housing.

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History of Mobile Homes

Mobile homes started as car attachments in the 1920s, and were primarily used for vacations or moving to new cities to look for jobs. During World War II, private and government developers built mobile homes on unoccupied land near factories to house workers in war-related industries. The U.S. experienced a massive housing shortage when the troops returned from war, and more mobile homes sprang up in order to ease the shortage. The number of mobile homes continued to grow through the end of the 20th century, with mobile homes comprising 7.6 percent of the housing stock in 2000.

The number of trailer parks and mobile homes took off in the 1980s, when the Reagan administration slashed federal funding for affordable housing. In the 2000s, mobile home sales suffered during the housing bubble because loans for traditional homes were readily available. Additionally, construction of new parks has slowed down because trailer parks are often not perceived favorably by city officials and neighbors. Mobile homes provide the largest stock of unsubsidized affordable housing in the U.S., but they are decreasing as a share of available housing at a time when the U.S. is facing a dearth of affordable housing for low and very-low income families.

Mobile Homes are Concentrated in the South and Southwest

Mobile homes comprise the largest share of the housing stock in the South and Southwest, and the lowest one in the Northeast. Metros in red in the map below have the highest share of households living in mobile homes, and the circle size represents the number of households living in mobile homes.

The top four states with the highest concentration of mobile homes are New Mexico (16.6 percent), South Carolina (15.7 percent), West Virginia (14.4 percent) and Mississippi (14.1 percent) are the states with the highest concentration of households living in mobile homes.

The top three metros with households living in mobile homes are Goldsboro, N.C., Las Cruces, N.M., and Lake Havasu City, Ariz., where roughly one-quarter of metro households live in mobile homes.

Hawaii has virtually no mobile homes, due to the fact that trailer parks are illegal in the state. The lack of mobile homes could be one factor (among many) contributing to the severe shortage of affordable housing in the state, which has the second-highest rate of cost-burdened renters. After Hawaii, Connecticut, Massachusetts, New Jersey, Rhode Island and Maryland have the lowest share of mobile home households.

Mobile Homes Help Meet Demand for Affordable Housing

The average household income for a mobile home household is $34,000, and nearly one-quarter of households are living below the poverty line. With only 11 percent of low-income households receiving government housing assistance through Section 8 vouchers, mobile homes are a key source of low-cost housing. As Frank Rolfe, owner of about 200 trailer parks in 25 states, told TIME magazine last year, “as America gets poorer, mobile-home parks are the only form of housing devoted to this demographic.” In the 100 largest metros, mobile home residents spend an average of 40.5 percent less on housing costs than those living in traditional, site-built homes in the same metro.

While mobile homes provide a cheap alternative to traditional homes, they provide a unique set of challenges. Owners of manufactured homes face many similar challenges as renters, including rent increases and evictions, but are often unable to move for a few reasons. Finding a new spot for a trailer can be difficult, and many states prohibit hauling older manufactured homes on highways. Additionally, moving a mobile home costs $5,000 on average, or nearly two months of pay for the average manufactured-home household.

While selling a mobile home remains an option, mobile homes lose as much as half their value in three years, making the choice to sell a daunting one. Additionally, because mobile homeowners don’t own land, they must take Chattel mortgages instead of standard mortgages. Chattel mortgages are loans where an item of movable property, such as a manufactured home, is used to secure the loan. These loans carry higher interest rates than standard mortgages, reaching, for example, as high as 10 percent for a household with poor credit.

These factors help explain why 56.4 percent of mobile home owners have lived in their current home 10 or more years, despite that fact that many view their move to a trailer park as a temporary one.

Are Mobile Homes A Solution to the Shortage of Affordable Housing?

During and after World War II, mobile homes helped increase the U.S. housing stock rapidly in order to meet a spike in demand for housing. Again in the 1980s, the supply of mobile homes increased rapidly to meet the demand for affordable housing as the federal government cut the budget for the Department of Housing and Urban Development (HUD). Today, all states face a shortage of rentals available to extremely-low income renters, and the lack of homes for sales has led to skyrocketing home prices. Can manufactured homes once again provide a solution to the housing crisis for poor Americans and perhaps even for the middle class households being priced out of homeownership? In the current housing crisis, the stock of mobile homes is not growing, but changes in design and local policy can unlock the potential for manufactured homes to be a part of the solution.

While increased construction is needed to meet the high demand for homes and stabilize prices, labor shortages in the construction industry are slowing down builders. Manufactured homes are built in factories, rather than on-site and are therefore cheaper to build and more readily tap into alternative labor pools that are not as tight as construction. For example, a factory in Fresno, Ca., where the unemployment rate is 7.5 percent, could build manufactured homes for the San Francisco Bay Area. Larger or more upscale manufactured homes could house middle-class households at lower costs than site-built homes. Even in metros without shortages of construction workers, mobile homes can provide cheaper housing options and a more rapid increase in housing stock.

Mobile homes offer a source of housing dedicated to lower-income households without government subsidies and, thus, could be attractive to local governments. There are some signals that the government is trying to increase production of mobile homes in order to ease the housing shortage. For example, earlier this year, Fannie Mae & Freddie Mac announced plans to purchase more manufactured home loans to spur the mobile home market and hopefully create a secondary market for manufactured home resales. Additionally, HUD is considering reducing regulations on producing manufactured homes, which could decrease costs but also reduce quality.

In order to become a wider solution to the affordable housing crisis, mobile home park developers will need to overcome NIMBY -- “not in my backyard” -- attitudes and zoning laws that prevent them from locating within single-family neighborhoods. Even without these barriers, manufactured homes are unlikely to provide a viable solution in dense urban areas. Mobile homes, with a typical lot size of 960 square feet, offer increased density compared to townhomes and single family homes, but they offer far less density than mid-sized multifamily buildings. In metros with a severe shortage of housing, such as San Francisco, Seattle and Denver, mobile homes are often unable to provide sufficient density to be worthwhile. That said, preserving existing mobile home parks is important for low-income households in expensive metros, as residents are hard pressed to find alternative housing at similar costs.

With a growing gap between the supply-and-demand of low-cost housing, mobile homes may be one of the faster and cheaper ways to provide housing for lower-income households. Mobile homes provide a better solution for the affordable housing shortage on the outskirts of metros or in rural areas than in dense urban areas. If mobile homes are able to win buy-in from local governments and neighbors, which may entail changes in design, their role as a source of affordable housing would likely increase.

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Methodology

1. All figures are calculated using 2010 and 2016 American Community Survey data and 2000, 1990, 1980 and 1970 Decennial Census Data, accessed from the IPUMS-USA database.
2. Data for the number and share of mobile homes from 1970-2016 uses data for occupied and vacant homes. All other figures refer to household-level data, which only accounts for occupied housing.
3. Mobile or manufactured home households refer to those living in a “mobile home or trailer.” All housing comparison statistics exclude those living in group quarters or those without a home (i.e. homeless households).